Don't thank AK but thank yourself in future (UPDATED).

My blog was born in December 2009 on Christmas Eve. 

When asked if I expected things to develop the way they have developed in recent years, the answer is always "NO". 

Sometimes, I would answer "I have created a monster" because my blog and its related activities are demanding more of my time than before. 

I am fully aware of one of the risks my blog is facing because blogging is a hobby and I enjoy it because it is a hobby. 

The day blogging becomes work, I might no longer enjoy it. 

It is about setting a more leisurely pace so that it remains a hobby I enjoy.

Having said this, blogging comes naturally to me because I enjoy writing, sharing ideas I believe in and ideas which have worked for me. 

So, this is the writer and teacher in me rolled into one. 

In a nutshell, through my writing, I enjoy helping people to help themselves.

From the many emails and messages I have received from readers, I discovered that my blog has been helpful and many people have made positive changes in their lives because of my blog. 

This is probably the most rewarding aspect of blogging for me.

I have shared some encouraging messages from readers before and here are a couple more which I received recently:

Hi AK,

Thanks for speaking to yourself all these years!

I've been eavesdropping !

Introduced a friend who was a terrible spendthrift to your blog last year - and is so glad to find that she has started saving quite a bit!

Our tag line now is "what would AK do?" Ha!!!!

Many thanks for your friendship !




And


Hi AK, 
 After seeing saizen rise today(my biggest holdings), I just wanted to drop u a msg to thank u for opening sharing all your thoughts through social media!

I think I am beginning to understand and appreciate your investment strategy especially after seeing u add ARA and Vicom recently.

Your strategy seems to be within a fixed framework of investing for income but u are flexible as well. Just like water in a cup. Haha. 

Flowing but contained. (Am I making sense?) 

I am referring to your recent sale trades of Sembcorp and Wilmar.

You don't seem to be fixated on holding forever but at the same time not jumping in and out through trades. 

 All in, thank u and hopefully many more people will appreciate what u do!

I cannot publish all the messages, of course, but to all the readers who have sent similar messages to me before, thank you for making the effort to write.

I hope that talking to myself in my little corner of cyberspace will continue to help people who are listening in. 

I hope that we will all make incremental positive changes in our lives to have a financially more secure future. 

For most of us, the desired outcome will take many years to achieve. 

We might feel tired or even demoralised at times but remind ourselves that as long as we are moving in the right direction, we cannot be wrong and we are getting closer to our goal with each passing day. 

We will see the light at the end of the tunnel and we will thank ourselves in future.

Related post:
How to have a comfortable retirement?

Saizen REIT: Received a firm offer and unit price jumps.

Messages were coming in fast asking me what was happening to Saizen REIT as its unit price shot up. Well, this happened:

Further thereto, the Manager wishes to announce that the Manager has received a firm offer in relation to the assets of Saizen REIT which the Evaluation Committee and the joint financial advisers are currently reviewing and evaluating. No definitive agreements have been entered into and there is no assurance that the offer will be accepted and that definitive agreements will be entered into.

 

 Earlier in the year, I had a blog post on how undervalued Saizen REIT was. Of course, it wasn't really a new angle on the REIT as I blogged about it many times over the last few years.

In that blog post back in April, I asked if investing in Saizen REIT was a good idea for you. Whether it was a good idea would depend on your motivation and your temperament.

Although deeply undervalued, I said "whether the value could be unlocked and returned to unit holders is much harder to say. Could we see an acquisition by a residential J-REIT?"

I also said that "anyone who is buying into Saizen REIT, hoping for value to be unlocked, will have to be patient and also remember that it might or might not happen."

Of course, regular readers know that Saizen REIT is a big part of my portfolio for years. I have been patiently waiting for value to be unlocked and while I waited, I received regular dividends.

It is not a bad thing to be paid while we wait, I feel.

So, what did you do?

Announcement: here.

Related posts:
1. Saizen REIT: Deeply undervalued?
2. 9M 2015 passive income from S-REITs.

What should I do after losing money in a bond fund? (UPDATED JULY 2018)

UPDATED JULY 2018

In an environment of rising interest rates, bonds especially longer term ones are unlikely to do well.

Bond funds without any maturity date are probably in the same boat or worse.

Hold for another 2 or 3 years and wait for market to bounce back?

That is a salesperson talking.

Never ask a barber if we need a haircut.

No one cares more about our money than we do.

Not interested in reading up and have no idea about investments?

Be interested and ask pertinent questions or you will be doing yourself a great disservice.





-------------------------------------------


Earlier this year, when I delivered a talk one evening to a group of investors, one lady told me she just got into a bond fund then and after listening to me, she asked if she should get out of it.

I told her I couldn't make the decision for her.

It was her call.





I was reminded of that encounter because of this recent email from a reader:

Hi AK,

I have invested my SRS money with XXX fund beginning of this year, at that time I am not interested in reading up and have not much idea about investment.

I was told the fund has a loss of 3K out of my invested 10K now.

The agent told me I need to give him 2 -3 years and wait for the market to bounce back.

The fund consist of bonds and I just concern with the increase of interest rate may make the situation worst. 

What will you do if you were in my shoes ? 

I have ran the figure on excel, to make back 3K of lost based on 7K capital with 4% return a year , I need 11 years :(

Please start to talk to yourself already and I know your disclaimer by heart :p

Many thanks, J. 
 

My reply:

Hi J,

The XXX fund you got into earlier this year sounds like a bond fund.

It is one of those things that I said I wouldn't touch with a five feet pole in anticipation of rising interest rates.

Unlike equities which can recover because of improving fundamentals even when interest rates are higher, bond prices move in the opposite direction of interest rates.

Ask your agent what made him tell you that the bond fund will recover in another 2 or 3 years?

Is he merely speculating? We want to give him a chance to explain himself.

We are reasonable people, I am sure. ;)

Best wishes,
AK


Unless we have very good reasons, don't be bonded.





Related posts:
1. Buy a bond fund?
2. SRS: A brief analysis.

Sabana REIT: What is a fair price and what could they do?

The last time I blogged about Sabana REIT was in February this year.

I suggested that we might want to view some assertions in cyberspace that Sabana REIT offered great value for money because of its relatively high yield and rather big discount to NAV with a dose of scepticism.

What I was most concerned about was the matter of expiring master leases, 11 in all.

Subsequent to the end of 3Q 2015, the Manager converted one building, namely 23 Serangoon North Avenue 5, from master lease to multi tenanted.

The Manager is in the final stage of negotiations for remaining 10 master leases slated to expire in 4Q 2015.

Source: Press Release.

 What is the occupancy of 23 Serangoon North Ave 5? I very much doubt that it is 100%. DPU is already lower in Q3 and it is likely to take another hit in Q4 as property income reduces and operational cost goes up because of this development.


Also, the language lacks transparency. When we hear "final stage of negotiations", we get the impression that negotiations are likely to be successful.

However, realistically, we should be prepared that more properties would be converted from having a master lease to being multi tenanted.

A lack of transparency makes it difficult for anyone to estimate what is truly a fair price to pay for Sabana REIT. Annualising Q3's DPU of 1.77c is a mistake but let's do it anyway. 7.08c. With a unit price of 78c, we are looking at a 9.07% distribution yield.

If Mr. Market is willing to pay 78c a unit, my interpretation is that Mr. Market is probably expecting quarterly DPU to decline to 1.56c or a 12% decline from 1.77c in due course. This would give an eventual 8% yield at 78c a unit.

Now, is Mr. Market right?

Well, we know the saying that Mr. Market is always right but if the DPU should decline by much more, what then?

We should be able to make a more accurate guess by end of the year and be dead sure by end of 1Q 2016.


So, if we are buying Sabana REIT with the understanding that DPU would probably reduce quite significantly and are comfortable with it, then, 78c a unit might be a fair price to pay for us.

However, if we feel that an entry price of 78c a unit with an estimated 8% yield a few months down the road would not sufficiently address some other risks such as:

1. Rising risk free rates means Mr. Market might demand a higher distribution yield. All else being equal, unit price would have to decline.

2. Rising interest rates also means a higher debt burden which would weigh down DPU. Maturing debt in 2016. $138 million. Would cost of debt increase?

3. Expiring leases in 2016. About 11.4% of NLA is expiring in 2016 and that includes another master lease.

4. Declining interest cover ratio. It has dipped below 4x and is now lower at 3.8x.

5. Possible decline in value of properties. This would impact gearing level.

We won't be wrong to ask to what degree has a unit price of 78c a unit taken all these in?

If Sabana REIT is confident that its NAV/unit of $1.04 or so is realistic, then, I would like for them to sell some of their properties. That is probably the best way to see if the valuations are realistic. 

Of course, the reason for this suggestion is really to unlock value for the shareholders and strengthen the REIT's balance sheet.


Related post:What is the right price to buy into Sabana REIT?

Sabana REIT's Presentation in September 2015 for investors: here.

SP Services say total amount payable is $0.00! (AK uses his air con more but keeps the bill in check.)

(Update 4 Jan 17): 
AK has denied SP Services some revenue! Happiness is a utility bill that looks like this.

All thanks to the really cool weather recently (and not the miserable reduction in electricity tariff).
-------------
Since having my own place once more, I have had discussions with friends on more domestic topics like the household utility bill. In all these discussions, I discovered that my utility bill is relatively low.

My consumption is below the national average for my house type, apparently.

What about my bill in dollar terms?

It has remained more or less the same compared to my utility bill a few years ago when I had my old place and stayed there for 4 years or so, $100 a month, give or take a few dollars. I think this is quite remarkable.

I absolutely cannot live without the air con being on at home. If I am home, the air con and air purifiers are on. Since I am home for many more hours now each day compared to a few years ago, the air con is on for many more hours per day too.

I also watch more TV now as I have more free time. I like watching the Travel Channel, HGTV, Discovery Channel, National Geographic and the History Channel. 

I have a 40" Full HD LED TV now compared to the 26" LCD TV I had in my old place before I replaced it with a 32" LED a year before I sold the place. I think my many TV watching hours now should consume more electricity.

How is it that my utility bill has not gone up much?

I think it is fair to say that the air con probably consumes more electricity than other electrical appliances at home. So, the first thing to do is to make sure to insist on having the energy saving Invertor technology. 

4 ticks, nothing less.

Then, I will usually set the air con temperature to 24 degrees centigrade. On a very warm day, maybe, 23 degrees centigrade.  

The lower the temperature we set, the higher the energy consumption. So, 23 degrees centigrade is usually the lowest I would go.

I have a friend who sets the temperature to 18 degrees centigrade at home as the norm. That is freezing and sends the energy bill through the roof!

Well, since moving to my new place, I got acquainted with my new Invertor air con which has a neat dehumidifier function. This function removes moisture from the air.

Often, we feel warm because of the high humidity level in our climate. The human body is not able to cool itself as well in a humid environment. If we are able to lower the humidity level in a room, our body will feel cooler naturally.

If we set the air con to dehumidifier mode, it lowers the humidity level in the room to about 60%. This is much lower than the usual humidity level in Singapore.

What does the symbol look like? 

A couple of  water drops. Unfortunately, you won't find this mode in older air cons.

If you have Invertor air cons at home and if they are quite new, they should have the dehumidifier mode. If you cannot live without the air con on at home, try this mode. It should lower energy consumption and you should see some savings.

When I go to bed, I would switch the air con back to the regular mode, the one with the snow flake symbol. 

This lowers the humidity level as well as the temperature in the room. 24 degrees centigrade, of course.

It keeps the room cool enough and I don't even need to use a blanket. Just need to wear socks to bed. 

I hope I have not put anyone to sleep with this blog post. Zzzzzz.
Related posts:
1. Photos of AK's home.
2. What can we do to survive the haze?

InvestX Congress 2015: Chit chat with readers.

Happy that I got to meet many readers at InvestX Congress 2015. 

I was part of the 4 member Q&A panel at the end of the day and because not everyone got to ask me the questions they had, I stayed back till 7.30pm to continue chatting with readers who came up to me. 

I hope I answered all their questions and, more importantly, got them thinking about their own strategies. Yes, it is important to have our own strategies. 

Don't simply do what I do because you like to build passive income. Not everyone can do or should do what I do. 

Remember: 
Have a plan, your own plan.

I received quite a few emails and there will probably be a few more to come. I would like to share a couple of emails from readers here and I hope they inspire:

Hi AK,

Re your articles related to saving, I had cut my morning gourmet coffee from 5 times / week to 2 times per week, every 5 cups  purchased , I get 1 free coffee :) still can't cut down totally, enjoying sitting in the cafe before start working.

I bring breakfast, lunch and fruit to the office regularly except when I meet friend for lunch. When I lunch out I try to cap at 6sgd per meal (work in CBD). 

I start to track my expense and had established a budget for 2016. I have decided it will be a frugal year for us. Extra money goes to investment. 

I have purchased my first 4 stocks in my life and more to come as I learn. 

For tomorrow, I will wake up early to pump milk for my baby boy, take MRT and bring my breakfast to attend the event of the year :) Thanks for sharing and always be there to answer our email.

Hi J,

It sounds like you have a plan and making progress too. Good on you! :D

I think you will see that every dollar does add up over time. :)

Hope you enjoyed InvestX 2015. ;)

Best wishes,
AK




Dear AK,

I finally got to meet you in person :)

I shall try to keep this short and sweet because I'm sure many readers email you, comment on your blog and your active blogging takes up quite a bit of time.

You were the one that sparked my interest in investing and also providing avenues of learning i.e. Dividend Machines, InvestX Congress 2015. From there it has encouraged me to keep learning and also sharing with others what I have learnt (as much as it's very basic).

I don't have much to ask you right now because I should put in the effort/due diligence in learning and forming my foundation from your blog and the treasure trove of previous posts as well as books, the internet, seminars/talks etc. I just have to put in effort searching through your blog with the search function or follow related posts.

I'm a newbie hence I want to keep and open mind and consider as many perspectives as I can. I never knew of the existence of "shorting". Sell High, Buy Low. I was like huh what magical technique this is. There's so much to learn out there! I only scraped some simple concepts of TA like Moving Average and CCI, which admittedly I have yet to fully internalize. Off to "investing/trading" school for me :D

I would like to thank you again for sharing your knowledge freely. I'm sure you get it often but I really mean it each time I say it.

F

Hi F,

I am happy to see so many readers at InvestX 2015. 

I am always happy to talk to myself as long as people are interested in listening. ;)

All of us were newbies at one time. 

The learning process these days is probably a bit less daunting and a bit more fun thanks to the internet. 

It is easier to get our hands on information and also to be educated. I am sure you will do well in time to come. :) 

Best wishes,


If you went for InvestX Congress 2015 and would like to share with me what you think of it, please leave your thoughts in the comments section below.

Source: The Fifth Person.

Thank you and have a good day!


Related posts:
1. Greater financial well being is not beyond us.
2. Heart to heart talk on achieving financial freedom.
I keep saying that all of us have difference circumstances in life. We might make very different choices in life and with those choices, there are pluses and minuses. We must make the best of our situations and, if possible, improve on our situations.
3. AK is a panelist at InvestX Congress 2015.